There's a whole subculture for fonts smaller than 8 by 8, with real world uses for things such as small LED displays, for example. This is at the extreme end, though.
But I guess if you can build fonts that generate barcodes, and fonts that have LLMs built in, then you could design a 1 pixel high font that uses Morse code to represent most ASCII characters.
At least, I think the 2-pixel high Two Slice font can be more legible with some anti-aliasing.
On some displays, you can also divide RGB into three subpixels (R, G, and B stripes). A 3x5 pixel font (9x5 subpixels) can be drawn as a 6x5 subpixel font instead (a 2x5 pixel font).
The linked one is unreadable at all to me lol
The highest DPI screen is 127,000 PPI. You could fit over 14,000 lines of 8x8 text in a single inch tall screen.
For reference, a decent monitor is 140 PPI.
I'm pretty sure we don't need to go below 8x8 if physical size is the issue.
And yeah, you could throw on more hardware to have a display nearby and use that for text. That is not the problem being solved though.
By using the three available colors on my older model, I was able to render numbers up to 199 in a readable way. Two digits on the right are 8x3 and one on the left is 8x2. I quickly abandoned two pixels of width as impossible for making legible text for all digits, so seeing a full font at two pixels wide is a fun surprise.
Thanks for the tip on Mystrix—looks neat.